1. Slavery is abolished. Therefore, no company may own
people. This leads to difficulties with the idea of human
capital. We know people make a huge difference. How,
exactly?
This leads to the question what exact aspect of human
resources is fully owned by the organization, and therefore
costs associated with that can be quantified and added to
the balance sheet of the organization as human capital.
Improved understanding enables improved management
which enables improved results. The revision of social
science methodology leads to the general theory of psy-
chology, which leads to better understanding of organiza-
tions and so to better results. All previous discussions are
based on this idea. [Refer earlier newsletters, and the paper
Little, Graham Richard, Organization Design: Linking
Mind to Its Agreed Organization Role as a Foundation of
Economics (July 31, 2016). Available at SSRN: http://
ssrn.com/abstract=2816604]
There is nothing more useful than the correct theory
Science represents better thinking. People in organizations
and organization themselves arise from human activity.
Therefore, better science of human activity will shed light
on people in organizations and on the nature of organiza-
tions themselves. The science of human activity is social
science. Globally, social science is weak, with no formal
methodological structure such as available in physical
science. These arguments lead to the need to redesign the
methodological foundation of social science, then apply
that to build the solution to the general question … (1)
What are the causes of why someone does what they do?
Then apply that to build solutions to two questions: (2)
How are organizations created? (3) What exactly is the link
between people and the organization?
The result is the general theory of psychology [Little, Gra-
ham Richard, The Origin of Consciousness (July 26, 2016).
Institute of Theoretical and Applied Social Science, New
Zealand, Sixth edition, March 2016. Available at SSRN:
http://ssrn.com/abstract=2814742] which leads to the OPD
theory of organizations [refer ‘Organizational design’]
which leads to the technology of building and operating
organization OPD-HCD™.
OPD-HCD™: The science of organizations
Applying OPD-HCD™ results in better results than from
applying any other system. Why? Because it is built on
better science, deeper understanding, greater insight.
Full details on the background thinking is in the books (all
free of charge in PDF) and papers at my SSRN author page
www.ssrn.com/author=2572745, and at my LinkedIn pro-
file, summary section and posts, www.linkedin.com/in/
grahamrlittle.
This background is summarized below leading to the defi-
nition of human capital within OPD theory. Full discussion
of human capital within OPD theory is in the book, Human
Capital, [http://www.slideshare.net/Graylit/human-capital-
wheelers-pdf?ref=https://www.linkedin.com]
Getting it clear on paper enables it clearer in mind
Strategy: A complex goal giving direction to the organiza-
tion.
Business plan: Strategy is broken down in any accounting
period into the KPIs in each role of the organization.
If all KPIs achieved, then the strategy is achieved to
that extent with the period.
Goal-action: The principle that for every goal there are
actions (called ideal actions) that must be carried out
for the goal to be achieved.
Role specifications: Summary of the KPIs and ideal ac-
tions needed to deliver the KPIs, also summary of
the ideal actions required to deliver the business
processes that integrate the role into the rest of the
organization.
Behavioural structure: The set of ideal actions across the
organization that must be acted out if the organiza-
tion is to achieve its strategy for that accounting
period.
The CEO knows that if the behavioural structure acted out
to standard the KPIs will be achieved and the organization
will be successful within that accounting period.
The behavioral structure is specified in the role specifica-
tions across the organization. The full set of organizations
wide role specifications is called the standing human
capital. Management is defined as striving for perfectly
defined role specifications, hence is the task of building
perfect description of the action needed to deliver strate-
gy.
Linking people to the organization
People act according to the ideas they hold in mind, the
intensity of action determined by the emotions associated
with the ideas. Via the attention mechanism people can
choose to release the actions or not, therefore all mood
and conduct is a choice.
The ideas applied in any circumstance is referred to as
their game plan in that circumstance.
People are linked to the organization by them choosing to
build the game plan of them at work from the role specifi-
cation. Their game plan is then imbued with their desire to
be successful and enjoy their work life supported by the
team leader who keeps the game plan top of mind and
ensures the people having fun at work while doing the
things they need do to be successful in their work life by
delivery of agreed ideal actions to standard.
Game plans in mind is defined as dynamic human capital.
Leadership is enhancing the dynamic human capital of the
team.
Summary of human capital
Standing human capital: Owned by the organization.
Define the behavioral structure of the organization relative
to the strategy. Is that behavioral best practice the organi-
zation strives to have acted out by the people. Standing
human capital can be capitalized and as asset in the bal-
ance sheet.
Dynamic human capital: Resides in the mind of the
people. It is the understanding, commitment and skill of
the people in doing their job. Dynamic human capital is
not owned by the organization, and cannot be capitalized.
It is strictly an economic factor rented from society.
Better thinking, better technology, better results
OPD-HCD™: Perfect game plans perfectly delivered
Newsletter #28
Human capital
Newsletter topics
1. Seeking new thinking.
2. How to double profits.
3. Goal—action.
4. Linking staff action to
strategy.
5. Human performance
driving results.
6. HR as rollout of strate-
gy.
7. Behavioral structure of
the organization.
8. Understanding human
psychology.
9. Linking people to be-
havioral structure.
10. Perfect human perfor-
mance.
11. Performance manage-
ment moving actual
toward perfect perfor-
mance.
12. Built in flexibility.
13. A scientifically proven
balanced solution to
human performance
as a driver of results.
14. Redefining engage-
ment.
15. Culture.
16. All HR policy changes.
17. Lifting expectation.
18. Redefining leadership.
19. Redefining manage-
ment.
20. Why has it not been
done before?
21. Stop. Reflect. Chose
and improve.
22. Why can’t we do it
ourselves?
23. Mind of the CEO.
24. HR as the ‘right hand’
of the CEO.
25. Building a ‘verbal
ready’ Executive.
26. Understanding human
motivation.
27. Building and imple-
menting an integrated
motivation policy.
28. Human capital.
29. Finding and develop-
ing talent.
30. Choosing better ideas.
Reading these newsletters you will gain
new insight into how to manage the link
between people and your organization so
that both benefit by increased results,
greater success, increased profits, more
fulfilling work, and greater satisfaction.
Contact: info@opdcoach.com to meet and explore how this system will lift results in your business.
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